Contractors work on a home renovation in the West End of Aspen on a recent afternoon. While dollar volume sales are up in Aspen in the first quarter, closings are down slightly and the number of properties under contract has fallen by 30 percent compared to this time last year.

Real estate heads different directions in first quarter

Contractors work on a home renovation in the West End of Aspen on a recent afternoon. While dollar volume sales are up in Aspen in the first quarter, closings are down slightly and the number of properties under contract has fallen by 30 percent compared to this time last year.

During the first quarter of the year, real estate sales in Aspen and Snowmass Village reflected two different markets, according to information compiled by a pair of real estate firms, and in discussions Tuesday with individual agents.

Through March 2018, the average per square foot price of an Aspen property rose 14.3 percent year-over-year, to $1,499, according to information provided by Douglas Elliman Real Estate. The luxury home market, which is the upper 10 percent of all condominiums and single family homes, saw five sales with an average sales price of $16.4 million.

When all Aspen condominiums and single family homes were computed, the average sales price came in just shy of $5 million, or $4.98 million, according to their data.

Andrew Ernemann, broker associate with Aspen Snowmass Sotheby’s, said that sales in Aspen totaled $217.19 million for 45 transactions during the first quarter. Last year during this same time frame there were 51 Aspen property sales that totaled $176.78 million.

“On paper, it looks like things are doing great,” said Ernemann, who offered a caveat that the sample size of sales in this market is relatively small and that one outlier sale could skew the data.

But Ernemann also said he is seeing some cautionary flags on the horizon in an Aspen market that’s seen annual price increases since it began to emerge from the recession in 2011.

Not only are the number of sales, year-to-year, flat against 2017, but as of April 30, there were 30 percent fewer Aspen properties under contract than one year ago, he said. That impact may be seen in the number of closings during the second quarter, unless the trend turns in short order, he added.

By contrast, the number of properties under contract in Snowmass Village is up 67 percent compared to the first quarter of 2017.

“There are 32 properties pending,” with projected closing dates beginning in mid-May, said Stacey Kelly, who works in partnership with Greg Rulon in Douglas Elliman’s Snowmass Village office. “I think that’s saying something.”

Between January and March of this year, there were 44 closings in Snowmass Village for a total dollar volume of $38.72 million, according to information from the multiple listing service. Last year during the same period, Snowmass recorded 31 closings for a total of $58.02 million.

One factor is available inventory, according to Ernemann and Kelly. Total number of listings is down 9 percent compared to last year in Aspen but is up 1 percent in Snowmass Village. And inventory is down by about 40 percent in Aspen when compared to 2011, Ernemann said.

Kelly said there’s been a recent uptick in interest from sellers, some of whom have been waiting for the right time to put properties on the market now that the Base Village project is again on track.

“We are anticipating at least 10 more properties coming on market between now and summer,” based upon listing presentations and discussions with owners, she said.

What’s interesting, Kelly said, is that “there’s not one hot neighborhood. It’s all over the board.” The listing service reflects that of the 44 sold properties, 35 were condos or town homes and nine were single family homes.

Part of this recent Snowmass surge has come from “cautionary buyers” who were wary pending the Base Village restart. Sellers too were hesitant because of the base area uncertainty, which affected list price.

Seeing the Limelight and companion buildings go vertical, in advance of a November opening, seems to have given the market a boost, both to properties surrounding the base and those that are outlying, she said.

Five of the 11 residential properties in the Limelight that are available for ownership are under contract. Studios and smaller size units in the existing Viceroy Hotel seen as good values have also been gaining popularity with buyers.

The average sales price per square foot for condos and single family homes in Snowmass Village was $719 during the first quarter of 2018, or less than half of Aspen’s per-square-foot price, according to the Douglas Elliman information. That’s up from $653 in the first quarter of last year.

The Limelight units, at between $1,300 and $1,400 per square foot, are pricing closer to the Aspen average, according to Kelly. Those units, as well as one in the contiguous, luxury Lumin building, are expected to close in the fall when the certificates of occupancy are issued.

Altogether, there was modest activity last year for properties priced at $5 million or more in Snowmass Village, with a $5.95 million Horse Ranch home the top sale. That could be impacting the prices on the lower end of the market, and serving to hold them down, Ernemann surmised.

Currently under contract is a home for $11.7 million in Two Creeks. Kelly and Rulon are seeing some families who purchased their properties in the 1960s, ’70s and ‘80s contemplating selling, now that Base Village is moving ahead and the Snowmass Center may be redeveloped.

From the purchaser’s perspective, “they are getting some pretty good buys for them to use for themselves or to entertain business clients right now,” Kelly said.

Similarities to 2016

If Aspen is in a “slowing down market, Snowmass seems to be moving at same pace or better than the last couple of years,” Ernemann allowed.

He also noted how prices in Aspen are very specific to each neighborhood; for example, demand remains high and inventory low for new residential construction in the downtown area.

There are few, if any, bargains left of fixer-uppers and “not many buyers want to take on a project” that could involve permits and could take several years, Ernemann said.

Uncertainty due to “financial market jitters and political jitters” could also account for current slowing Aspen sales trends.

“Everybody comes here from a different place,” he said. “If they’re not feeling as confident and are starting to feel like there are issues or cracks in the foundations, they’ll sit on the sidelines.”

Ernemann said there have been some similarities to how 2016 started “slow for the first eight months, then the market took off again.”

That could potentially happen again this year, he said, pointing to the potential of a resurgence during 2018’s second half.